2.1 (2) Flashcards
What type of growth is inorganic?
External
How can companies be innovative?
Investment in R&D
List 3 challenges that can arise from overseas expansion:
- Adhering to an unknown market- Logistics- Recruitment- constructing a new management chain
List 2 methods of internal growth:
- Diversification- Line extension
List the advantages and disadvantages of organic growth:
A: Less risk than externalCan take advantage of economies of scaleD: Limited growthCan be slow
List the advantages and disadvantages of inorganic growth:
A: Growth is more rapid Greater market share D: Risky/expensiveCulture/management conflict
List 2 internal sources for financing expansion:
Selling assets and retained profit
List 2 external sources for financing expansion:
Loan capital and share capital
List 5 reasons why a business may change its aims and objectives:
Changes in:- Market conditions- Technology- Performance- Legislation- Management
List 3 ways that business aims and objectives may change:
- Focus on survival/growth- Entering or exiting markets- Growing/reducing workforce
List 2 different types of integration:
Vertical and horizontal
What is globalisation?
Companies operating on an international scale
What are imports?
Goods or services purchased from overseas
List 2 reasons why goods may be imported into the UK:
-They cannot be produced there-It is cheaper to produce them elsewhere
List 2 barriers to international trade:
-Tariffs-Trade blocs
What are tariffs?
Taxes imposed on imported goods
List 3 impacts of imposing tariffs:
-Protects national firms/products-Increases cost of living-Reduces global trade
What is a trade bloc?
An agreement between nations to trade with each other without restrictions, whilst imposing tariffs on others
Why may a business compromise on profits to be ethical?
It can improve their long-term reputation
What is a pressure group?
An group that seeks to influence the policy, legislation and activities of an organisation
How can pressure groups influence business ethics?
By threatening their image, which in turn forces them to take ethical considerations into account
List 2 advantages to a business of being ethical:
-Can add value-Appease stakeholders
List 2 disadvantages to a business of being ethical
-Unsatisfied shareholders-Can be seen as a gimmick
